RBC and TD settle SEC charges

RBC Capital Markets and TD Bank Group have reached settlements with the U.S. Securities and Exchange Commission (SEC) over significant recordkeeping violations, agreeing to pay a combined total of approximately US$91.5 million in penalties. RBC will pay US$45 million, while TD, including its recently acquired Cowen and Co., will pay US$46.5 million to the SEC and an additional US$82 million to the U.S. Commodity Futures Trading Commission (CFTC). The enforcement action, announced by the SEC, is part of a broader crackdown on financial institutions regarding their use of electronic communications. The SEC found that both banks engaged in "pervasive" off-channel communications, failing to preserve text messages and other alternative communication methods as required by regulations. This issue has raised concerns about compliance and transparency within the financial sector. In response to the penalties, RBC expressed satisfaction in resolving the matter and reaffirmed its commitment to regulatory compliance. Similarly, TD Bank stated that it fully cooperated with the regulators and is taking steps to enhance its electronic communications policies and procedures to prevent future violations. This enforcement action is part of a larger initiative by U.S. regulators, which has resulted in over US$1.2 billion in penalties across 26 financial institutions, including previous fines imposed on Scotiabank and the Bank of Montreal. The ongoing scrutiny highlights the increasing importance of maintaining proper communication records in the financial industry.